A common approach to dealing with missing data in econometrics is to estimate the model
on the common subset of data, by necessity throwing away potentially useful data. In this paper we
consider a particular pattern of missing data on explanatory variables that often occurs in practice and
develop a new efficient estimator for models where the dependent variable is binary. We derive exact
formulae for the estimator and its asymptotic variance. Simulation results show that our estimator
performs well when compared to popular alternatives, such as complete case analysis and multiple
imputation. We then use our estimator to examine the portfolio allocation decision of Italian
households using the Survey of Household Income and Wealth carried out by the Bank of Italy.

We study how investability, or openness to foreign equity investors, affects firm value in a sample
of over 1,400 firms from 26 emerging markets. We find that, on average, investability is
associated with a 9% valuation premium (as measured by Tobins q). However, in firm-fixed
effects regressions this valuation premium disappears, suggesting that investability does not have
a causal effect on firm value. Analysis of the components of Tobins q shows that firms that
become investable experience significant increases in both market values and physical investment.
These effects are strongest for firms that face country-level or firm-level financial constraints
prior to becoming investable.

Abstract. We argue that current funding campaigns to fight AIDS in developing countries fail
to recognize significant losses associated with the introduction of innovative treatment
technologies. For instance, the future albeit uncertain appearance and widespread use of a
therapeutic vaccine will trigger significant and unrecoverable losses in current drugs treatment
investments. Our objective is then two-fold. We first document losses associated with the
transition to better treatment technologies and we show that failure to hedge against such
losses leads to sub-optimal policies. Our second objective is to provide policy
recommendations to alleviate this problem. We show how to transform some cutting-hedge
financial products to generate full insurance coverage against such losses, and in some cases
how to achieve full risk-sharing with agencies developing innovative treatments. We
recommend that every funding campaign in current AIDS treatments be accompanied with the
provision of...

We test for contagion between pairs of East Asian equity markets over the period 1990-2007. We develop an econometric methodology that allows us to test for both "shift" and "pure" contagion within a unified framework. Using both Hong Kong and Thailand as potential shock sources, we find strong evidence of both types of contagion. Therefore during episodes of high-volatility, equity returns are influenced by changes in the transmission of common shocks and additionally by the diffusion of idiosyncratic shocks through linkages which do not exist during normal times.

Using the change in ordinary dividend payout as a proxy for improved governance, I show that cross-listing in the U.S. is associated with enhanced protection for the minority ordinary shareholders of exchange listed non-U.S. firms. These firms substitute dividends for enhanced governance. I find no such effect for Rule 144a firms. Interestingly, I document evidence inconsistent with the legal bonding hypothesis for Level 1 firms. I believe that their ability to pay lower dividends post-listing is primarily due to their ability to credibly commit to fair treatment of their minority investors, given their record for equitable treatment of their ordinary shareholders. They achieve this reputation by consistently paying out a sizable proportion of their earnings as dividends. I find that the firm-level governance of Level 1 firms, as measured by the number of closely held shares improves in the post-listing period. I find no such effect for Rule 144a traded firms. My results al...

This paper uses a multivariate vector error-correction generalized autoregressive conditional heteroscedasticity model to investigate the effect of British grain prices on their Irish equivalents. We find that in the long run the law of one price holds and in the short run the model captures the salient features of Irish grain prices. The model is used to compute rolling forecasts of the conditional means, variances and covariance of Irish grain prices one year ahead. We find that this model produces superior forecasts compared to those based on a commonly used methodology of an autoregressive conditional mean model where the second moments are estimated using a fixed weight moving average

We analyze a model where irrational and rational informed traders exchange a risky asset
with irrational market makers. Irrational traders misperceive the mean of prior
information (optimistic/pessimistic bias) and the variance of the noise in their private
signal (overconfidence/underconfidence bias). Irrational market makers misperceive both
the mean and the variance of the prior information. We show that moderately
underconfident traders can outperform rational ones and that irrational market makers can
fare better than rational ones. Lastly, we find that extreme level of confidence implies
high trading volume.

Though relatively small, the subprime mortgage-backed securities market is often identified as
the source of the crisis that swept through the U.S. financial system from 2007 onwards. We
investigate if its role in the propagation of the crisis was due to contagion or interdependence.
Using a Markov-switching VAR with time-varying transition probabilities, we analyze the
transmission of shocks across the financial system. We find little evidence of asset correlation
changes between normal and crisis regimes and those that do occur are predominantly associated
with liquidity variables. Otherwise, relationships are stable across market conditions, implying
that the U.S. financial crisis was due to cross-market interdependencies rather than contagion.
There is limited evidence that the deteriorating quality of the underlying assets can explain the
transition from 'normal' market conditions to a high-volatility regime although his is not
consistent across model specifications.

Computability theory came into being as a result of Hilbert s attempts to
meet Brouwer s challenges, from an intuitionistc and constructive standpoint,
to formalism as a foundation for mathematical practice. Viewed this way, con-
structive mathematics should be one vision of computability theory. However,
there are fundamental diÂ¤erences between computability theory and construc-
tive mathematics: the Church-Turing thesis is a disciplining criterion in the
former and not in the latter; and classical logic - particularly, the law of the
excluded middle - is not accepted in the latter but freely invoked in the former,
especially in proving universal negative propositions. In Computable Economics
an eclectic approach is adopted where the main criterion is numerical content
for economic entities. In this sense both the computable and the constructive
traditions are freely and indiscriminately invoked and utilised in the formaliza-
tion of economic entities. Some of the mathematical met...

Swales C.; Economics Branch; Department of Health; Social Services and Public Safety

Abstract:

This summary report follows on from the publication of the Northern Ireland physical activity strategy in 1996 and the subsequent publication of the strategy action plan in 1998. Within this strategy action plan a recommendation was made for the health sector, that research should be carried out to evaluate and compare the cost of investing in physical activity programmes against the cost of treating preventable illness. To help in the development of this key area, the Department of Health, Social Services and Public Safety's Economics Branch agreed to develop a model that would seek to establish the extent of avoidable deaths from physical inactivity and, as a consequence, the avoidable economic and healthcare costs for Northern Ireland.

We review the literature on gold as an investment. We summarize a wide variety of literature, including the papers in this special issue of International Review of Financial Analysis to which this survey acts as an editorial introduction. We begin with a review of how the gold markets operate, including the underresearched leasing market; we proceed to examine research on physical gold demand and supply, gold mine economics and move onto analyses of gold as an investment. Additional sections provide context on gold market efficiency, the issue of gold market bubbles, gold's relation to inflation and interest rates, and the very nascent literature on the behavioural aspects of gold.

There are many dimensions to the economics and marketing of
tobacco in Ireland, but the sheer size of the industry and the
amount spent on this item are a good start. Each year around six
billion cigarettes are smoked in the Republic of Ireland as well as
322 thousand kilos of tobacco products In total, consumers
spent roughly €l ,869 million on tobacco produces in the year 2000,
almost 4 per cent of all personal expenditure. Though estimates of
both the numher of regular smokers and the amount that they
.smoke is not very precise, the percentage of regular smokers
(more than one cigarette per day) in the adult population is
somewhere between 28 and 30 per cent, each one consuming an
average of 21 cigarettes, We know from research however that
smoking is not confined to adults and that by the Iate teenage
years, the percentage smoking almust equals the proportion of
adult smokers, although a far higher number will have tried
smoking.

The importance of addressing the issues relating to the economics
and financing of long-term care for older people in Ireland cannot
be over emphasised. This is because we are approaching a period
when the numbers of old people are expected to increase significantly
and the numbers of the very old will grow quite
dramatically.
For service providers this means that every effort must be made to
ensure that a sufficient provision of high quality institutional care
is available for those old people who require such care. More
importantly perhaps, it means that adequate long-term care for the
elderly in the community, as advocated by The Years Ahead report,
should begin to materialise more effectively than has been the case
since the publication of that report.
In particular, we believe that it is short-sighted not to ensure much
greater support to informal carers who provide the greater part of
long-term care in the community. The numbers of carers may be at
an historically high level a...

We analyse the stability of linkages across Eurozone bond markets during the sovereign
debt crisis. We distinguish between contagion and interdependencies as mechanisms for
spreading the turmoil across bond markets. Using a three-regime Markov switching VAR,
we identify two distinct phases of the crisis - the bad and the ugly - and find differences
in shock transmission between them. Overall, evidence of contagion is scant and
interdependence is the more common determinant of market comovements.

During the Great Recession many Irish workers experienced nominal earnings cuts. The proportion of all job stayers suffering earnings cuts trebled in the peak crisis years, with over 55% of workers receiving earnings cuts at the height of the crisis. However, while earnings cuts were common the evidence suggests substantial heterogeneity in earnings dynamics; at the same time as many workers were experiencing cuts, a substantial minority of workers continuing to receive earnings rises throughout the crisis. In this paper we use a unique dataset containing earnings data on every worker in every firm in Ireland from 2005-2013 to examine the relative role of worker and firm characteristics in explaining the observed heterogeneity in earnings dynamics. Our results show that firm effects play a smaller role in determining pay changes in Ireland. Although firm effects become more important in the peak year of the economic crisis, even then the vast majority of earnings changes continue to...

This paper examines the feasibility of various alternative potential student loan schemes for Ireland. Using National Employment Survey data for 2006, we model the life-cycle earnings distribution for Irish graduates. We then use these estimates to simulate the effects of alternative types of student loans, including mortgage-type (government guaranteed bank) loans and income-contingent loans of various designs, incorporating participation and migration patterns into the simulations. The results show that mortgage-type loans entail unsustainably high repayment rates for low income graduates. Through the specification of several alternative income-contingent loan schemes, it is demonstrated that this approach to higher education financing is feasible in terms of affordability for graduates and with respect to implied government subsidies. There are some important policy design issues to be addressed and we conclude with some recommendations for a future Irish scheme.

We develop a model in which informed overconfident market participants and informed
rational speculators trade against trend-chasers. In this model positive feedback traders
act as Computer Based Trading (CBT) and lead to positive feedback loops. In line with
empirical findings we find a positive relationship between the volatility of prices and the
size of the price reversal. The presence of positive feedback traders leads to a higher
degree of trading activity by both types of informed traders. Overconfidence can lead to
less price volatility and more efficient prices. Moreover, overconfident traders may be
better off than their rational counterparts.

This paper analyzes the competition of heterogeneously informed traders in a multi-auction
setting. We obtain that the competition can take different forms depending on the number of
traders, trading rounds and the noise in the information. When the number of traders is small and
the number of trading rounds is large, traders may trade very aggressively at the opening and at
the end of the trading day with lower trading intensity in between. Hence, we can explain volume
patterns by the nature of the competition between traders rather than by pattern in the level of
liquidity. We find that the noise in the signal may be beneficial for traders when the competition is
strong as it gives them a monopolistic position on their private information. The amount of noise
maximizing the trader’s expected profit increases with the number of trading rounds as well as the
number of traders. This implies that the value of information is closely related to the market where
that information is subse...

We test for contagion between banking stocks – global and domestic – and the domestic nonfinancial
sector for eleven Eurozone countries. Using a Markov-switching Factor augmented
VAR (MS-FAVAR) model, we assess changes to the transmission mechanism of shocks as
we move from ‘normal’ market conditions to a high-volatility, ‘crisis’ regime. Results
confirm the role of contagion in propagating shocks between the global and domestic banking
sectors but show that the non-financial sector suffered little contagion. In general, the nonfinancial
sectors appear to ‘de-couple’ from the global and domestic banking sectors.

This paper examines the relationship between attendance and grade, controlling for other factors, in first year economics courses in University College Cork. Determinants of both class attendance and grade are specified and estimated. We find that attendance is low, at least by comparison with US evidence. Hours worked and travel time are among the factors affecting class attendance. Class attendance, and especially tutorial attendance has a positive and diminishing marginal effect on grade, while hours worked in a part-time job have a significant negative effect on grade.

THESIS 8107This thesis is concerned with institutional arrangements and empirical tools that may be used to assess the impact of regulation on the economy, and thereby improve regulatory policymaking. We start in Chapter 2 with a qualitative introduction to regulatory impact assessment, highlighting some of the challenges facing small regional governments wishing to improve the quality of regulation they enact. The remainder of the thesis is divided into two parts. Part 1 considers and evaluates the optimal design of tests aimed at discovering specific classes of regulatory impact. Our particular example is a negative clearance test for the effect of regulations on competition. One such tool, the UK competition filter, has been in operation in the UK since 2002. Applying it to case studies from Ireland (in Chapter 3), we show that particular design features may easily lead to excessive false negative results. We then propose a more appropriate structure for tests of this kind. ...

THESIS 7950This work is an examination of the causes of divergence between the competition law of the European Communities, specifically Articles 81 and 82 of the E.C. Treaty and the regulation of mergers, and the microeconomic treatment of competition and industrial organisation. It is based on an analysis of the jurisprudential explanations of the objectives of Community competition law, Luhmann?s theory of autopoiesis on the interaction of the legal system with other social systems, the philosophy of the methodology of economics, the Chicago School?s critique of judicial antitrust policy and a detailed case study of the treatment of tacit collusion in both Community law and the microeconomics literature.